Peripheral nerve allografts were inserted between the cut ends of nerve to determine whether host nerve fibers would regenerate through the nerve graft and reinnervate denervated muscle. Host nerve fibers were found to functionally regenerate through 2 cm but not 4 cm nerve allografts regardless of whether the nerve allograft bore major and minor or only minor transplantation antigens. Functional nerve regenration did occur through a 4 cm allograft if the recipient was made immunologically tolerant to donor transplantation antigen. Preliminary studies have indicated that cyclophosphamide or antithymocyte serum could prevent the rejection of a nerve allograft but appropriate doses of the drugs which would not produce toxic side effects and yet permit functional reinnervation have to be determined.